ThyssenKrupp plans US mill ahead of takeover
Steel giant says that project will go ahead even if its bid for Dofasco fails
Germany’s largest steel manufacturer, ThyssenKrupp AG, still plans to go ahead with the construction of a US $3.04 billion (EUR2.3 billion) downstream mill in the US, regardless of whether its bid for Canada’s Dofasco is successful.
The company recently announced a net-profit rise of 58% in its latest financial year, helped by a robust steel business, and said it would continue to pursue the acquisition of Dofasco.
ThyssenKrupp lost a bidding war with Arcelor SA over Dofasco earlier this year, but during Mittal Steel’s successful battle to acquire Arcelor, Mittal pledged to sell Dofasco to ThyssenKrupp.
The mill project planned by ThyssenKrupp Steel AG and ThyssenKrupp Stainless AG would strengthen the position of both companies in the US region, particularly with the NAFTA market being one of the highest-volume markets for high-grade flat carbon steel. Above average growth is forecast in the coming years for stainless steel flat products.
In its meeting in August, the Supervisory Board of ThyssenKrupp AG approved a project development budget of $50 million to be used to commission consultancy and engineering services, to prepare the choice of site and purchase the real estate.
Central to the plans for the greenfield project is the construction of a hot-strip mill, which will be used to process slabs from the new CSA steel mill in Brazil. The new plant will also feature cold-rolling and hot-dip coating capacities for high quality end products of flat carbon steel. ThyssenKrupp Steel’s investment in the plant, which will have an annual capacity of 4.5 million tonnes, is estimated at $2.3 billion.
In addition, ThyssenKrupp Stainless plans to build a melt shop with an annual capacity of up to one million tonnes of slabs, which will be processed on the hot strip mill.
“In the past the focus was on consolidation. Now we have moved up a gear and are on a clear, profitable growth track,” said CEO, Ekkehard Schulz, in a statement.